UK's Economic Recovery?

SMEs Challenge Government to Put its Money Where its Mouth Is

Friday May 15, 2015

There's no doubt that it took more than lip service and promises to pull the UK economy out of its nosedive after the banking crisis. The kind of small business explorer we love at RIFT has been a major factor in the recovery, and the economic terrain of 2015 is very different from 2010's as a result. We've got a larger, wilder business community than we've ever had, and it needs to be properly supported.

Small business adventurers have cut the path that has helped put Britain back on track, and now it's time to recognise their contribution with something more than words. It won't be easy to live up to our expectations, but it will be necessary. There have been a few promising signs already, with the appointment of the first ever Small Business Minister, Anna Soubry, but it'll take a much more concrete strategy than we've seen in anyone's manifesto for SMEs to secure their proper place on the business landscape.

To zoom out to the big picture for a moment, small businesses account for 99.3% of all private sector business in the UK. They employ 15.2 million people and have a combined turnover of £1.6 trillion. These are grand adventures we're having here, and we should be celebrating them in song and passing down their stories to our children for generations to come. The government may well be playing the champion wherever it can, but we all know who the real heroes of the recovery are.

The coalition did some pretty solid work to nudge small businesses in the right direction with the recent budget and the Small Business Bill, but we need fireworks now rather than sparklers. The Conservatives present themselves as the party of business, but it's time we showed them that "business" means a lot more than the few faceless giants they tend to focus on. Small businesses have different needs, evolve different cultures and speak different languages - none of which are going to be served by standard political strategies and “regulatory frameworks” rooted in the past.

Right now, we've got some economic growth and the chance to build momentum but UK productivity is still hanging in the balance, a full 20% below the average for G7 countries. If you're a small business looking to scale up, you're facing a steep and rocky climb. You might not have affordable access to good broadband, or traditional lending institutions might be slamming their doors to you. These are all things that the new government needs to be working on – because small business is already finding its own solutions and a sluggish adminstration will find itself struggling to keep pace.

The UK is one of the world's top knowledge-bases, with four universities in the global top 10, but no party seems to have struck on a way to translate that outstanding resource into leading-edge innovation and productivity. We've heard plenty about "cutting red tape" and "rolling back the state", but no real plan for putting the UK's potential to work. Turning potential into reality, of course, is the strong suit of all successful business explorers, so learning to see the world through an adventurer's eyes would be a big step in putting together policies that work.

Of course, innovation isn't all about white coats and science labs. There are already some amazing tax incentives on offer to the mad thinkers of UK business, but far too little is being done to make sure people know about them. The rise of the Sharing Economy is a perfect example of what can happen when small businesses start thinking outside the box, and government now needs to find new ways to help them expand boundaries and break through limitations grounded in outdated Big Business thinking. Right now, perfectly viable businesses are going under because they just don't know about the assistance or resources they're missing out on. Simply talking about the Sharing Economy has already done a lot to promote it. Imagine what an actual, coherent political strategy could accomplish.

The small business eco-system is evolving faster than ever now. Whatever governments come or go, RIFT Accounting will never stop fighting to make sure you get the support you need and the recognition you deserve.